3 Clever Ways to Handle Your Student Loan Debt
By The Money Manual Considering a private student loan requires looking carefully at the best options out there. Let’s do that.
Need to borrow money to pay for school? You’re hardly alone. In fact, the average student at a public university borrows over $25,000 to complete their bachelor’s degree.
As you navigate the student loan process, your first step will be to apply for federal loans. But if you need additional help, consider private student loans.
Below, we’ll look at three of the best private student loans available, each with links to let you discover everything you need to know to find the best fit for your needs. We’ll even deal with student loan refinancing options here.
Mistakes When Choosing a Student Loan
The student loan process might be complicated, but you can avoid some of the most costly mistakes if you know about them ahead of time.
So here are five of the biggest mistakes to avoid when you’re choosing a student loan:
- Not calculating exactly how much you’ll have to pay each month. You’ll have to base life decisions on this number, so make sure you know what it is!
- Choosing the wrong repayment term. If the repayment term is too short, you might not be able to afford your payments. If it’s too long, you’ll pay more in interest.
- Not checking interest rates. If you’re not used to borrowing money, all those decimal points, percentage signs, and acronyms can seem overwhelming. But remember, the interest rate is what determines the total cost of your loan!
- Blindly choosing a variable-rate loan. The variable rate might start out as the cheapest option, but it could increase in the future. That doesn’t mean a variable-rate loan is never a good idea – but make sure you go into it understanding the risk.
- Borrowing more money than you need. Repaying a loan is hard. Don’t make it even harder by borrowing too much.
The Good News
The good news is that you’re all about education, which makes you a smart person. Knowledge is power, of course, so now that you know the mistakes that many people do make, you can strategically learn from those mistakes and make your choice based on the best options available for you.
Look through all the options above, take notes on the details, and make your best choice.
